Rents to Riches? Factoring in the Political Economy of Natural Resource-Led Development
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Subsoil natural resource endowments and associated rents --if well harnessed and managed--can serve as a boon to developing countries. Yet, too often, the extractive industries of oil, gas, and mining have been associated with the "resource curse" whereby nations that are more dependent on nonrenewable natural resources grow more slowly than resourcepoor countries and often suffer from weaker governance and institutional quality.i In many developing countries, natural resources are the main game in town--and the extractive industries sector is both shaped by and, in turn, influences political, economic, societal, and institutional dynamics. Understanding the political economy of resource rents is therefore crucial to achieving sustainable development built on resource riches.
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